<PAGE>

                                                                    Exhibit 99.1

                              SETTLEMENT AGREEMENT

      This SETTLEMENT AGREEMENT (this "Agreement") is entered into as of this
3rd day of May 2006 by and among Costa Brava Partnership III, L.P., a Delaware
limited partnership ("Costa Brava"), and the Board of Directors of TechTeam
Global, Inc. and TechTeam Global, Inc., a Delaware corporation (together,
"TechTeam" or the "Company").

      WHEREAS, Costa Brava is the beneficial owner of 8.8% of the outstanding
shares of Common Stock of TechTeam;

      WHEREAS, on February 23, 2006, Costa Brava notified TechTeam of its intent
to nominate seven directors to replace the Company's current Board of Directors
at the Company's 2006 annual meeting in accordance with the nomination
procedures set forth in the Company's by-laws and the Company has stated its
intent to contest Costa Brava's nominees and nominate its own slate of nominees
(the contest between the two slates being the "Proxy Contest"); and

      WHEREAS, Costa Brava and TechTeam engaged in settlement discussions to
determine the best course for the Board of Directors of the Company and wish to
set forth the terms for resolving the Proxy Contest;

      NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:

      1. Date of Annual Meeting; No Amendment to By-laws. The Company's annual
shareholder meeting will be held on June 14 , 2006 (the "Annual Meeting"), and
the Company will not amend its by-laws prior to the Annual Meeting.

      2. Board Composition; Observer Rights. The Company has nominated the
following slate of eight directors to stand for election at the Annual Meeting:
Alok Mohan, James A. Lynch, Kent Heymann, General John P. Jumper (USAF Ret.),
Andrew R. Siegel, William C. Brown, Richard Widgren, and James G. Roche (each, a
"New Director"). From the date of this Agreement until each New Director is
elected to the Board of Directors of the Company, each New Director who is not
currently a director of the Company and has executed a non-disclosure agreement
shall have the right to attend all Board of Director meetings (including
committee meetings) as an observer.

      3. Chairman of the Board. After the Annual Meeting, Alok Mohan will serve
as Chairman of the Board until the first meeting of the Board of Directors after
January 1, 2007, at which point the Board will again elect a Chairman, which may
or may not be Alok Mohan.

      4. Expense Reimbursement. The Company will pay Costa Brava's expenses, up
to a limit of $700,000, in connection with its efforts to replace the Company's
current Board of Directors and its efforts to obtain documents from the Company
pursuant to Section 220 of the DGCL ("220 Action"). Costa Brava will provide the
Company with a reasonably detailed itemized invoice listing the expenses
incurred by it in relation to the Proxy Contest and 220 Action for which it
seeks reimbursement. The Company will pay such invoiced amounts by wire transfer
of immediately available funds within fifteen days of receipt by the Company



<PAGE>

from Costa Brava of the invoice; provided, however, the Company will not have to
pay Costa Brava's expenses relating to the 220 Action until the 220 Action is
dismissed with prejudice.

      5. Company Representations and Warranties. The Company represents and
warrants to Costa Brava as follows:

            (a) The Company is a corporation duly organized, validly existing
      and in good standing under the laws of the State of Delaware. The Company
      has the full power and authority to execute, deliver and carry out the
      terms and provisions of this Agreement, and has taken all necessary action
      to authorize the execution, delivery and performance of this Agreement;

            (b) This Agreement has been duly and validly authorized, executed
      and delivered by the Company and constitutes a valid and binding
      obligation of the Company, enforceable in accordance with its terms, and
      no other proceeding on the part of the Company is necessary to authorize
      the execution, delivery and performance of this Agreement;

            (c) The Company has not amended its by-laws since February 13, 2006;
      and

            (d) At the April 10, 2006 Board of Directors' meeting, the Board set
      the Chairman's monthly compensation at $6,250, to be effective as of the
      date of the Annual Meeting.

      6. Dismissal of Litigation; Release of Claims. Subject to the performance
of this Agreement, (i) the parties agree to stay the litigation in Delaware
against the Company, and stipulate to dismiss such litigation with prejudice
promptly following the Annual Meeting and (ii) Costa Brava agrees that it will
not bring any further litigation against the Company or on behalf of the Company
in connection with any specific issues mentioned by Costa Brava in its filings
with the Securities and Exchange Commission. Further subject to the performance
of this Agreement, Costa Brava and the Company release and forever discharge
each other, and their respective directors, officers, partners, principals, and
employees, from all claims and demands, rights and causes of action of any kind
arising out of the Proxy Contest. Notwithstanding anything to the contrary in
this paragraph, Costa Brava and the Company do not release any obligations or
claims arising under this Agreement.

      7. Withdrawal of Shareholder Proposal and Costa Brava Slate. Costa Brava
agrees to withdraw its (i) proposal submitted to the Company on December 26,
2005 for submission to the shareholders for vote at the Annual Meeting and (ii)
its proposal to nominate its own slate of directors at the Annual Meeting.

      8. Publicity. Except for the issuance of the press release in the form
attached hereto as Exhibit A, which shall be issued as soon as practical after
the execution of this Agreement, no public announcement or disclosure will be
made by any party with respect to the subject matter of this Agreement without
the prior written consent of the Company and Costa Brava; provided, however,
that the provisions of this paragraph will not prohibit (a) any disclosure
either party reasonably believes is required by any applicable law (in which
case the disclosing party will provide the other parties with the opportunity to
review the disclosure

                                      -2-


<PAGE>

in advance) or (b) any disclosure made in connection with the enforcement of any
right or remedy relating to this Agreement or other documents contemplated
hereby.

      9. Specific Performance. Each of the parties acknowledges and agrees that
the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that,
without posting bond or other undertaking, the other parties shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any claim, action, cause of action or suit (whether in
contract or tort or otherwise), litigation (whether at law or in equity, whether
civil or criminal), controversy, assessment, arbitration, investigation,
hearing, charge, complaint, demand, notice or proceeding to, from, by or before
any governmental authority (an "Action") instituted in any court of the United
States or any state thereof having jurisdiction over the parties and the matter
in addition to any other remedy to which it may be entitled, at law or in
equity. Each party further agrees that, in the event of any Action for specific
performance in respect of such breach, it shall not assert the defense that a
remedy at law would be adequate.

      10.Amendments and Waivers. No amendment or waiver of any provision of this
Agreement will be valid and binding unless it is in writing and signed, in the
case of an amendment, by the Company and the Costa Brava, or in the case of a
waiver, by the party against whom the waiver is to be effective. No waiver by
any party of any breach or violation or, default under or inaccuracy in any
representation, warranty or covenant hereunder, whether intentional or not, will
be deemed to extend to any prior or subsequent breach, violation, default of, or
inaccuracy in, any such representation, warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent such
occurrence. No delay or omission on the part of any party in exercising any
right, power or remedy under this Agreement will operate as a waiver thereof.

      11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute but one and the same instrument. This Agreement will
become effective when duly executed by each party hereto.

      12.Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction will not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. In the event that any provision hereof
would, under applicable law, be invalid or unenforceable in any respect, each
party hereto intends that such provision will be construed by modifying or
limiting it so as to be valid and enforceable to the maximum extent compatible
with, and possible under, applicable law.

      13.Governing Law. This Agreement, the rights of the parties and all
Actions arising in whole or in part under or in connection herewith, will be
governed by and construed in accordance with the domestic substantive laws of
Delaware, without giving effect to any

                                      -3-
<PAGE>

choice or conflict of law provision or rule that would cause the application of
the laws of any other jurisdiction.

      14.WAIVER OF JURY TRIAL. To the extent not prohibited by applicable law
that cannot be waived, the parties hereby waive, and covenant that they will not
assert (whether as plaintiff, defendant or otherwise), any right to trial by
jury in any action arising in whole or in part under or in connection with this
agreement or any of the contemplated transactions, whether now existing or
hereafter arising, and whether sounding in contract, tort or otherwise. The
parties agree that any of them may file a copy of this paragraph with any court
as written evidence of the knowing, voluntary and bargained-for agreement among
the parties irrevocably to waive its right to trial by jury in any proceeding
whatsoever between them relating to this agreement or any of the contemplated
transactions will instead be tried in a court of competent jurisdiction by a
judge sitting without a jury.


                       [Next page is the signature page.]


                                      -4-

<PAGE>

      IN WITNESS WHEREOF, the undersigned parties have duly executed this
Agreement as of the date first written above.


                                   COSTA BRAVA PARTNERSHIP III, L.P.

                          By:      Roark, Rearden & Hamot Capital
                                   Management LLC, its general partner

                          By:      /s/ Seth W. Hamot
                                   ------------------------------------
                                   Seth W. Hamot
                                   President



                                   TECHTEAM GLOBAL, INC.

                          By:      /s/ William C. Brown
                                   ---------------------------------------
                                   William C. Brown
                                   Chief Executive Officer, for the Company
                                   and on behalf of the Board of Directors